Back in my younger poor-college-student years, I’ve always been pissed that my cell phone bill was always substantially more than what my monthly plan costs due to cell phone taxes. Arnold taxes the average Californian 13.18% of their cell phone bill. If you tack on federal tax (5.48%), an average Californian will pay an extra $7.46 per month in taxes for a $40 per month plan. That’s about $90 per year. I was looking for ways to reduce this number and this is what I did:
- Researched which state had the cheapest cell phone tax (found out that it was Nevada with 1.14% tax rate).
- Opt for e-statement, so Sprint emails me statements instead of sending me a paper statements to my home address.
- Change my address online to Caesar’s Palace Casino:
3570 LAS VEGAS BLVD S
LAS VEGAS, NV 89109 - Start supporting the Nevada State government and watch my bill go down.
Here is the result of changing my billing address.
Before:
Government Taxes & Fees
San Jose City Utility Users Surcharge 1.17
California 911 Tax 0.11
California Universal Lifeline Tele Service 0.25
California Teleconnect Fund Surcharge 0.03
California Relay Service Device Fund 0.08
California High Cost Fund Surcharge 0.28
California State Excise Tax Surcharge 0.05
San Jose City 911 1.75
Surcharges & Fees
California P.U.C. Tax Surcharge 0.04
Federal Usf Non-ld Surcharge 0.92
Federal Wireless Number Pooling And Portability 0.15
Federal E911 0.40
Total $5.23
After:
Government Taxes & Fees
Nevada Relay Service Device Fund 0.03
Surcharges & Fees
Clark County Gross Receipts Surcharge 0.75
Federal Usf Non-ld Surcharge 0.92
Federal Wireless Number Pooling And Portability 0.15
Federal E911 0.40
Total $2.25
Three cents in Nevada related taxes. Notice that there is a Clark County surcharge that offsets the savings a little bit, but my taxes were still reduced by more than 50% overall. With this number, I’m only saving a $30 a year, but that’s because my monthly plan is low. People with more expensive plans will save a lot more since the Clark County surcharge is a flat fee.
Conclusion
If you have a cell phone, join me in sticking it to the man by using this loop-hole.
Are you still doing this? Is this not illegal?
@Casey
Thanks for visiting! I am still doing this and all of my friends and family are doing this too. As for the legal issue, the relevant federal law is the Mobile Telecommunications Sourcing Act (effective 2002) states that cell phone users are supposed to pay taxes in their “area of primary usage”. So technically, this is illegal unless my area of primary usage is in Nevada. That said, I’m willing to take the risk.
First, I believe we are already being taxed up the wahzoo. As a Software engineer, California already takes a pound of flesh from me every month. Second, I don’t believe my state government is spending the money wisely. When I get the vote ballot, they never have programs that I’m interested in. I’d rather donate my saved $30/year to my favorite charity.
If some tax guy decides that he really wants my money, he can call my wireless providers (Sprint & Cingular) and tell them to change their taxing system.
Thaya,
Thank you for the information!! I agree, that the state of California already takes a lot and doesn’t spend it wisely. That’s not even mentioning the GAS PRICES!! At this point, we have no idea where our taxes are going anyways. Remember Pennsylvania State Senator Vincent Fumo? If politicians are crooked and do what they want with our money. Then why shouldn’t we be allowed to find loop-holes.
Thanks again!
@Cris
Thank you for visiting! Don’t even get my started about gas prices. $50 only gets me half a tank now and my car only goes 350 miles per tank. Good thing I work so close to home ;).
350 miles per tank is good. I laugh now at all the gas guzzler owners that get 200 or less. Anyway, the tip is good, though I don’t feel comfortable to have my personal information potentially go there, in rare events.
@Artem Russakovskii
I have yet to get a call from Casesar’s palace about this. I wonder if they have a stack of mail for me if I ever decide to stay there when I’m visiting Vegas.
I just got my Sprint bill today and it looks like they are catching up to my little scheme. My address is still set to Caesar’s Palace, but I’m being charged for California tax. I’ve changed my billing address to Monte Carlo to see if this will set things back to the way it used to be. For the record, here’s Monte Carlo’s address:
3770 Las Vegas Blvd. South
Las Vegas, NV 89109
I will keep you guys posted on what happens.
*Update*
The change worked. My bill is back on Nevada tax. I’m guessing that all you have to keep is keep an eye on when your bill spikes up (that’s probably when they find out that your primary area of usage is not really in Nevada), then switch to another Nevada address to reset this.
I’ve been told that most cell phone companies charge based on the area code of the cell phone. If you have a nevada area code, you get charged the nevada taxes.